Health Care Reform Articles - July 11, 2019

Ed Weisbart: Think twice when you hear the words 'public option' health insurance 

by Ed Weisbart - St. Louis Post Dispatch - July 1, 2019

Shhh! Don’t tell the insurance companies (it’s a secret).
That’s the logic of the presidential candidates who are pushing a “public option,” also known as Medicare for Those Who Want It. They claim that adding a Medicare-like option onto the health insurance marketplace is an easier political lift than real Medicare for All, and that such an option would thrive in the free market and open the door for Medicare for All. Then the insurance industry would admit defeat and quietly ride off into the sunset, finally achieving what should have been done in the first place.
The fact that the insurance industry is lobbying hard for this circuitous incremental approach should tell you all you need to know.
Sadly, many of us don’t understand the choice we’re being offered. That helps them sell the idea that having more options is always better. It’s true that we need free choice of doctors and hospitals, but insurance should disappear into the background. That’s what would happen with Medicare for All; that’s not what would happen with a public option, and the difference is all-important.
We could spend the next few years passing a public option and then wait several more years to see how it works. Ten years later, we would still be playing catch-up with the rest of the industrialized world, where health care costs half of what it does here in America and yet produces dramatically better results.
Why isn’t a public option good enough?
First, it’s missing nearly all the savings of a single-payer system. Health care insurance companies operate at 15% to 20% overhead; Medicare’s overhead is 2%. We will never reach Medicare’s efficiency by keeping today’s complex insurance industry in the mix. Never. Plus, the insurance companies’ inefficiency — as high as it is — is dwarfed by the untold time and money patients, doctors and hospitals waste in dealing with those companies.
American hospitals employ one insurance-related clerk for every bed they operate. We physicians often spend half of our workday fighting insurance company barriers. We’re heartsick over seeing patients skip dosages or decline essential testing because they can’t afford them.
None of this waste disappears by adding one more insurance “option.” A public option would do nearly nothing to bring down the cost of health care.
Second, a public option would be funded by premiums and co-pays. It would essentially be another regressive tax, least affordable to those in the greatest need. Only the sickest of today’s uninsured would join, driving public-option prices up higher and becoming a “high-risk pool.” Insurance depends on a mostly healthy pool of patients to balance the sickest. Whenever you turn that on its head, it goes down in flames.
Last, a “public option” does nothing to help those who now have insurance. Millions would still have sky-high deductibles. They would still be constrained by networks that tell them which doctors and hospitals to use. They would still be forced to be on constant guard for surprise medical bills and charges, even when they go to in-network hospitals. Millions still would not have access to dentistry, eyeglasses and hearing aids.
Each of these problems would be resolved by simply passing the real Medicare for All bills, H.R. 1384 and Senate Bill 1129, featuring tax-funded comprehensive benefits with no premiums, no copays, no surprise bills and your choice of doctors and hospitals.
Both bills empower Medicare to negotiate drug prices for us. Most of the public-option bills do not.
Both Medicare for All bills would stabilize hospital finances by making sure every patient had insurance and reducing administrative burdens.
Both bills allow every American their choice of physician and hospital, without fearing that a change of jobs would mean changing insurance and searching for a new doctor.
Some worry that the adversaries of Medicare for All are too powerful. In other words, they want us to believe we can sneak our way there through a public option, as if the insurance industry will never see it coming.
The next time you hear a politician say they support Medicare for All, and that the best way to get there is through a public option, raise some of these challenges. Don’t let them derail the best solution; too many lives are at stake.
Ed Weisbart, MD, is a family physician and chair of the Missouri chapter of Physicians for a National Health Program.
https://www.stltoday.com/opinion/columnists/ed-weisbart-think-twice-when-you-hear-the-words-public/article_43106335-d4f1-546e-8ea9-24a8067bdf91.html

We love primary care. Why are our trainees so discouraged by it?

By Barbara Ogur, Katherine Miller, and Russell Phillips - STAT- July 11, 2019

We have been primary care physicians for a combined total of 98 years. Every day we are reminded why we do it and why we love this type of medicine.
Here are three examples from a single day in one of our practices that show how a trusting relationship built over time has been vital to providing good care. One patient was a young woman whose recurring sinus infections and refractory asthma were treated with single-contact visits with specialists for years. None of them identified the underlying immunological disease that was causing her problems. But by observing her clinical course over time, her primary care physician realized she needed to be seen by a specialist in vasculitis. She also needed ongoing rapid access to a doctor who knows her complicated history when new issues arise and can coordinate specialists so nothing falls between the cracks.
Another patient was a middle-aged man with severe back pain due to lumbar disc disease who had been prescribed opioids for his pain when that was the standard of care. Over the next five years, his work took him out of the area, and he switched to heroin as prescription opioids became hard to find. Feeling consumed with guilt, he returned to his primary care provider, told her what was happening, and asked about buprenorphine treatment.
A third patient, a woman with severe depression and poorly controlled diabetes, arrived in the office with her log of blood sugars, finally engaging in self-managing her disease after consistent outreach by a dedicated and caring team, some of whom she has known for 30 years.
These are not one-off visits to a walk-in clinic. Primary care at its core often requires a deep understanding of the patient and the development of trust over time. We feel honored by this trust and inspired to give our best to help.
So we are alarmed and confused when the residents we train choose to leave primary care. We agree wholeheartedly with a number of the issues they cite: the electronic medical record with its primary service to the billing department rather than the patient, the unfair reimbursement for non-procedural specialties, the overwhelming debt burden from medical training, the long hours, and the complex social and emotional contexts that complicate our patients’ care. These are undeniable barriers that sap the joy and satisfaction that come with providing the longitudinal coordination of care, advocacy, clinical reasoning, and caring that are the core of primary care.
For us, and many others, the joy of primary care has not vanished. We recently surveyed students who graduated from Harvard Medical School between 1980 and 2016 and matched into residency programs that might lead to careers in primary care. Only 48% of the respondents continued on with primary care. Those who did that said they were highly satisfied with their choice. Despite the travails of the electronic medical record, the long hours, the complex patients, and the lower pay, they still found intense satisfaction in their generalist’s practices and their deep connections with patients. The intensely engaging core of the work is still there.
Still, too many young doctors have lost faith that their ideals for primary care can be realized in today’s health care environment. We suspect it’s not just the electronic medical record, or even lifestyle issues. Practicing medicine has always been hard, and we know that our trainees are strong. We suggest that the root of their dissatisfaction is the corporatization and bureaucratization of medical practice, which impinges on our professional autonomy, leaving us less flexibility to do what needs to be done for each patient.
A call to overhaul primary care and deconstruct it into newly “specialized” and more manageable pieces worries us as being potentially problematic for the health of the public, since ample evidence documents better health indicators and higher patient satisfaction in societies that have robust primary care systems.
“Specializing” primary care does not guarantee freedom from debt, inefficiency, or burnout. We see other solutions:

• Address and solve some of the systems that overburden primary care providers.
• Support them with multidisciplinary teams to deal with the multitude of contextual factors that create poor health and complicate care.
• Train them differently so they see complex patients as deeply in need of their care and thus more rewarding to work with, and see systems obstacles as opportunities to innovate.

Fixing primary care doesn’t lie in turning away from it, but rather in working together to create a system in which physicians can effectively lead interdisciplinary teams in providing high-value and equitable health care to the populations they serve.
The dominant values of the environment in which medical students and residents learn medicine shape their experiences, the lessons they absorb, and the solutions they envision. We must train a cohort of young physicians who see themselves as change agents, and who embrace and advance the mission of primary care: to improve the health of the public through a continuous relationship with a caring provider who provides first access to care, coordinates treatment and preventive efforts, and advocates for patients in an often complex system.
We must also clear away b obstacles, and ensure that residents learn and train in an environment that promotes, rather than undermines, a vibrant primary care system that is at the core of a rational and effective health system.
https://www.statnews.com/2019/07/11/primary-care-discouraged-trainees/?

If Democrats are smart, they will attack Trump's real 2020 weakness - healthcare 

by Lloyd Green - The Guardian - July 11, 2019 

Unemployment and inflation are low. America growls, but its sword is sheathed. Donald Trump should be preaching peace and prosperity. Instead, the president appears determined to make his re-election bid about healthcare and relitigate the 2018 midterms. If past is prelude, that tale doesn’t come with a happy ending for Trump or his party.
At the moment, Trump may prevail in this latest skirmish over the Affordable Care Act (ACA), at least in the courts. But as far as winning the war for public opinion, that’s a whole other story.
Last November, Trump’s hostility toward the ACA ultimately elevated Nancy Pelosi to the House speakership. That same impulse may now cost him his view from the Oval Office. Come election day 2020, his latest dream may degenerate into a nightmare.
On Tuesday, Trump attacked the supreme court for previously leaving the ACA in place. As he framed things, “Recent ‘strained’ decisions by the United States supreme court … allowing the world’s most expensive & pathetic healthcare (Obamacare) to stay in place, when it would have been replaced by something far better, shows how incredibly important our upcoming 2020 election is.”
Trump wrote this despite his prior misadventures in healthcare. Back in his first year in office, Trump was ready to sign anything just so he could declare a victory. Indeed, after holding a Rose Garden rally for passing one iteration of Trumpcare, Trump turned around and lambasted the House GOP’s bill as cruel.
Also on Tuesday, 18 Republican attorneys general waged wholesale war on the ACA, claiming that the current iteration of the law is now unconstitutional as the result of changes made in 2017 to the tax law. According to reports, two Republicans on a three-judge appellate panel were open to striking down at least a portion of the most memorable piece of Barack Obama’s legacy.
The latest polls tell us that half the country views “Obamacare” as “mostly a good thing”, while fewer than 40% disagree with that proposition. Since the ACA’s enactment in 2010, the hostility surrounding the law has markedly abated.
In fact, voters have come to particularly appreciate those ACA provisions that mandate coverage for pre-existing conditions, and coverage for dependent children up to the age of 26. By the numbers, almost seven in 10 Americans “do not want to see” the supreme court overturn protections for pre-existing conditions.
On the other hand, if the ACA and its protections were struck down, the consequences could be grave. The Urban Institute reports that “the number of uninsured people in the US would increase by 19.9 million, or 65%”. In fact, the effects in swing-state America could be even more devastating, both on the personal and political planes.
All things being equal, the ranks of uninsured would more than double in Michigan and Pennsylvania. Florida would probably see a jump in uninsured by two-thirds. As for Wisconsin and Texas, the figure would swell by one-third. In other words, ACA repeal would be a dagger in the chest of the most purple of states. Were Trump to lose any three of those states, he would be forced into unplanned and early retirement.
Not surprisingly, Republicans in states won by Hillary Clinton are running scared. Take Maine’s Senator Susan Collins for instance.
Collins proudly stands by her vote for Brett Kavanaugh, but healthcare is something else. Together with the late John McCain, Collins successfully opposed ACA repeal in the Senate back in the summer of 2017. Now she’s voicing opposition to Trump’s legal strategy.
“DOJ Should Defend ACA, Protections for Pre-Existing Conditions,” declared a recent news release from Collins’ office. “133 million Americans – including 590,000 Mainers – are living with pre-existing conditions such as asthma, arthritis, cancer, diabetes, and heart disease.” The Democratic congressional leadership couldn’t make the argument for preserving the ACA any more strongly.
Trump’s determined efforts to undo the ACA may also provide the Democratic presidential field with badly needed cover against charges of socialism and cultural detachment. Right now, three of the four leading Democratic contenders – Kamala Harris, Bernie Sanders and Elizabeth Warren – raised their hands when it came to scrapping private health insurance. Sometimes the “perfect” really is the enemy of the good.
Only Joe Biden, Obama’s vice-president, is reluctant to go over a cliff, and wisely so. While Medicare for All may thrill the party faithful, parting with private insurance is a whole other story. Nearly 70% of the US rates their healthcare coverage as either good or excellent. In other words, most of the US is not looking to recreate the world anew.
What the electorate is hungry for is reassurance, not disruption. With Trump again waving his fist at the ACA, the Democrats would be wise to use this moment to their advantage. There is no reason why the 2018 playbook can’t work again.

• An attorney in New York, Lloyd Green was opposition research counsel to George HW Bush’s 1988 campaign and served in the Department of Justice from 1990 to 1992
  https://www.theguardian.com/commentisfree/2019/jul/11/if-democrats-are-smart-they-will-attack-trumps-real-2020-weakness-healthcare
  
  

Obamacare’s Precarious Fate

The Editorial Board - NYT - July 10, 2019

Two federal judges in one of the most conservative appeals courts in the nation appeared ready on Tuesday to fall for the most specious legal challenge that the Affordable Care Act has faced — which is saying something.
The two Republican-appointed judges on the three-judge panel of the United States Court of Appeals for the Fifth Circuit — Jennifer Elrod (appointed by George W. Bush) and Kurt Engelhardt (appointed by President Trump) — seemed to have little patience for the arguments in defense of Obamacare presented by lawyers for the House of Representatives and a group of blue-leaning states. (The third judge on the panel, a Jimmy Carter appointee, remained quiet during the arguments.)
The 2010 health care law is under fire once again because of a ruling by a federal judge in Texas in December, in which he declared the law unconstitutional.
Legal experts across ideologies criticized that decision. The Trump administration, which has long waged war against President Barack Obama’s signature legislative achievement, has more or less embraced the lower court’s ruling.

The case, Texas v. United States, is the third Republican attempt to destroy Obamacare by judicial fiat. Lawmakers haven’t been able to entirely undo the law, and the Supreme Court has upheld it twice.
After Mr. Trump signed in late 2017 the Tax Cuts and Jobs Act — which gutted Obamacare’s individual mandate by eliminating the tax penalty that the health care law imposed on Americans who choose to not buy health insurance — some Republicans devised a legal theory under which an individual mandate without a tax penalty could be rendered unconstitutional, dooming the rest of Obamacare. This includes Obamacare’s marquee (and popular) protections for pre-existing conditions and rules that allow people to stay on their parents’ insurance plans until age 26. After all, the thinking goes, in the Supreme Court’s landmark 2012 ruling upholding the law, the court declared the tax penalty a crucial component holding the statute together.
That’s exactly what the governors and attorneys general challenging the law — all of who hail from red-leaning states — are arguing. For these Obamacare foes, it isn’t enough to just excise the individual mandate from the law. The whole thing must go.
Judges Elrod and Engelhardt appeared receptive to this reasoning on Tuesday. “If you no longer have the tax, why isn’t it unconstitutional?” Judge Elrod asked.
In response to the argument by pro-Obamacare lawyers that Congress intended only to undo the tax penalty — not the entire law — Judge Elrod said: “How do we know that some members of Congress didn’t say: ‘Aha, this is the silver bullet that’s going to undo the A.C.A. . . . So we’re going to vote for this just because we know it will bring it to a halt’?”

“Your Honor, that would be imputing to Congress an intent to create an unconstitutional law,” said Samuel Siegel, a lawyer for the State of California.
The question now is whether the Fifth Circuit agrees. Its ruling is expected in the next several weeks, but the court would be wise to not further legitimize this charade. The health care of millions of people is at stake.
https://www.nytimes.com/2019/07/10/opinion/obamacare-health-insurance-court.html?smid=nytcore-ios-share

Obamacare in Jeopardy as Appeals Court Hears Case Backed by Trump

by Abby Goodnough - NYT - July 9, 2019

NEW ORLEANS — A federal appeals court panel will hear arguments Tuesday on whether a federal judge in Texas was correct in striking down the Affordable Care Act, a case with enormous stakes not only for millions of people who gained health insurance through the law but for the political futures of President Trump and other candidates in the 2020 elections.

The case, which could make its way to the Supreme Court ahead of those elections, threatens insurance protections for people with pre-existing medical conditions and many other sweeping changes the 2010 law has made throughout the health care system.

It was filed by a group of Republican governors and attorneys general against the federal government, which carries out the law. But the Trump administration refused to defend the full law in court and this spring said it agreed with the ruling that the law’s requirement for people to buy insurance was unconstitutional, and that as a result, the entire law must be dismantled. 

That has left a group of 21 states with Democratic attorneys general to intervene to defend the law, along with the House of Representatives, which entered the case after Democrats won control of the chamber last fall.

A question at the heart of the case is whether the Affordable Care Act’s mandate requiring most Americans to buy health insurance or pay a tax penalty remained constitutional after Congress eliminated the penalty as part of the tax overhaul that Mr. Trump signed in 2017. When the Supreme Court upheld the mandate in its landmark 2012 ruling that saved the law, it was based on Congress’s power to impose taxes.

If the mandate is indeed unconstitutional, the next question is whether the rest of the Affordable Care Act can function without it. In December, Judge Reed O’Connor of the Federal District Court in Fort Worth said it could not and declared that the entire law must fall.

But in late June, the United States Court of Appeals for the Fifth Circuit asked for supplemental briefing from the parties on a third question: whether the Democratic states and House of Representatives even have standing to appeal Judge O’Connor’s ruling. To establish standing, a party has to show it has suffered a concrete injury that a ruling in its favor would redress.

The court also asked what the appropriate conclusion of the case should be if the intervening parties do not have standing and if the Justice Department, by no longer defending any part of the law, has “mooted the controversy.”

These recently raised questions will most likely be the first ones addressed during the arguments, which are before a three-judge panel in the appeals court in New Orleans: Carolyn Dineen King, appointed by President Jimmy Carter in 1979; Jennifer Walker Elrod, appointed by President George W. Bush in 2007; and Kurt Engelhardt, appointed by Mr. Trump in 2018.

If the appeals court ultimately decides that neither the House nor the intervening Democratic states have standing and that the case has become moot, it could either let Judge O’Connor’s ruling stand or vacate it. In any event, the losing party will almost certainly appeal to the Supreme Court.

“All of this is going to be playing out against the backdrop of the 2020 presidential election,” said Nicholas Bagley, a law professor at the University of Michigan. He was among a bipartisan group of professors who argued in an amicus brief last year that the rest of the law should survive even if its mandate to buy insurance was found unconstitutional, and who have criticized the plaintiffs’ case as weak. 

Democrats are already running ads against Mr. Trump and other Republicansover the case, including five state attorneys general who signed on as plaintiffs and will be up for re-election next fall. Protect Our Care, an advocacy group that supports the law, will start running digital ads this week against Republican senators considered vulnerable next year: Thom Tillis of North Carolina, Joni Ernst of Iowa, Cory Gardner of Colorado and Martha McSally of Arizona.

“President Trump’s Texas lawsuit will overturn America’s health care laws,” said Leslie Dach, the chairman of Protect Our Care, “and every Republican lawmaker who refused to condemn it is complicit in the destruction of their constituents’ health care.”

All of the parties, including the Republican states and Mr. Trump’s Justice Department, have taken the position that the appeals court has a reason to hear the case because a “live controversy” remains between the Republican state plaintiffs and the federal government, which is continuing to enforce the Affordable Care Act. 

In supplemental briefs filed last week, all pointed to United States v. Windsor, in which the Obama administration changed its position and stopped defending the constitutionality of the Defense of Marriage Act — which barred federal recognition of same-sex marriages — but did not object to the case continuing to move through the courts.

The appeals court could take months to decide, but the Trump administration has said it will continue to enforce the many provisions of the Affordable Care Act until a final ruling is issued.

If Judge O’Connor’s decision stands, the number of uninsured people in America would increase by almost 20 million, or 65 percent, according to the Urban Institute, a left-leaning research organization. That includes millions who gained coverage through the law’s expansion of Medicaid, and millions more who receive subsidized private insurance through the law’s online marketplaces.

Insurers would also no longer have to cover young adults up to age 26 under their parents’ plans; annual and lifetime limits on coverage would again be permitted; and there would be no cap on out-of-pocket medical costs people have to pay.

Also gone would be the law’s popular protections for people with pre-existing conditions, which became a major talking point in last fall’s midterm elections, as Democratic candidates constantly reminded voters that congressional Republicans had tried to repeal the law in 2017.

Without those protections, insurers could return to denying coverage to such people or to charging them more. They could also return to charging people more based on their age, gender or profession.

https://www.nytimes.com/2019/07/09/health/obamacare-appeals-court.html 

 

How to Straighten Out the Medicare Maze

by Pamela Hurd and Donald Moynihan - NYT - July 4, 2019

“Medicare for all” was a central theme in the initial Democratic debates and promises to be a defining issue in the primaries. While nearly all the candidates support expanded access, they should be pressed on another crucial question: How will they reduce the burdens involved in dealing with the interwoven public and private insurance systems that provide our health care coverage?
As parents of a child with a disability caused by a rare genetic syndrome, we’ve wasted hundreds of hours sorting out enrollment choices, completing unending forms and engaging in maddeningly repetitious conversations, all to ensure that our daughter receives the care she needs and that we don’t get stuck with financially devastating bills.
While many other Americans continue to struggle with these problems, ours have mostly disappeared because we are spending the year in Britain. In its National Health Service, we found a system that did not demand an expertise in navigating bureaucracies. After 10 minutes filling out a few simple forms, we enrolled our daughter. Within two days she had an appointment and a filled prescription for medication, which was free.
We had anticipated the financial relief that can come from a single-payer system, but not the administrative relief. It had never occurred to us that it could be so different.

All the likely Democratic presidential nominees are on board with expanding coverage, but they disagree on the path forward. Some favor allowing people to buy into the existing Medicare system. Others support the idea of Medicare for all, but disagree on whether it would be a comprehensive single-payer system and what role private insurance would play. The focus on expanding access has left little room for discussion of the frustrations embedded in the current system.
Even if Democrats sweep the 2020 elections, the incrementalist history of health policy reform in the United States suggests that an expansion of the current Medicare program is the most probable outcome. And yet the sizable role private insurers already play in Medicare is largely overlooked, even as they cause substantial administrative burdens for beneficiaries.
More than one-third of Medicare beneficiaries are covered by private insurers, in what is known as the Medicare Advantage program. Many of the remaining beneficiaries have private insurance coverage, through Medigap and Medicare Part D prescription drug coverage or their former employers, to help offset the health care costs not covered by Medicare Parts A and B, which amount to almost half of the overall cost of their care. In fact, 44 percent of Medicare dollars goes through private insurance plans and a majority of Medicare beneficiaries must interact with private insurers.
Private insurers make Medicare extraordinarily confusing, increasing costs for beneficiaries and their own profits. When enrolling in Medicare, and then every subsequent year, beneficiaries are required to make a series of decisions regarding their coverage. Though there is a base benefit package, there are also many and varied options, ranging from which prescription drugs are covered to the amount of premiums, co-payments and deductibles. The plans also change every year.
Making the right choice means finding a match between your fluctuating health needs and the changing plans. It is as complicated as it sounds. Getting the best coverage for the lowest cost often requires switching plans nearly every year but very few people do this, leaving them with higher costs and less effective coverage. A study from the University of Pittsburgh, for instance, found that only 5 percent of Medicare beneficiaries in 2009 chose the cheapest plan that will cover their prescription drug needs.

Medicare beneficiaries are left feeling overwhelmed. As one noted, “I had papers taped together — it was six feet wide — of the different companies and circles and arrows.” Even health care experts struggle when they hit age 65 and need to enroll.
It’s not just Medicare. Nearly all coverage expansions over the last 20 years have relied on private insurers, including Obamacare. As the Medicaid program has grown, private insurers have played a larger role.
There are ways to make the process easier. The Bernie Sanders approach calls for effectively eliminating private insurance, including the private aspects of Medicare. An incremental alternative is to use a mixture of regulation and government guidance. Regulatory approaches could more seamlessly standardize plan options so that it’s easier to compare what you’re “buying” and reduce the number of options to ensure there isn’t a flock of essentially identical plans. Government can do more to help people enroll and ensure they receive the benefits to which they are entitled. Yet there has been little meaningful discussion of these options among the Democratic presidential contenders.
If Medicare for all merely puts the frustrations that people experience in the existing system under a public brand, it will be a magnet for attack. For any policy to be sustainable, voters need to demand that their leaders not only make health care more accessible, but also that they make it less burdensome.
https://www.nytimes.com/2019/07/04/opinion/medicare-for-all.html?smid=nytcore-ios-share

879% drug price hike is one of 3,400 in 2019 so far; rate of hikes increasing

by Beth Mole - Ars Technica - July 2, 2019 

Pharmaceutical companies raised the prices of more than 3,400 drugs in the first half of 2019, surpassing the number of drug hikes they imposed during the same period last year, according to an analysis first reported by NBC News.
The average price increase per drug was 10.5%, a rate around five times that of inflation. About 40 of the drugs saw triple-digit increases. That includes a generic version of the antidepressant Prozac, which saw a price increase of 879%.
The surge in price hikes comes amid ongoing public and political pressure to drag down the sky-rocketing price of drugs and healthcare costs overall. In May of 2018, President Trump boldly announced that drug companies would unveil “voluntary massive drops in prices” within weeks. But no such drops were ever announced. Trump then went on to publicly shame Pfizer for continuing to raise drug prices. The company responded with a short-lived pause on drug price increases mid-way through last year, but it resumed increasing prices in January—as did dozens of other pharmaceutical companies.
"Requests and public shaming haven't worked," Michael Rea, chief executive of RX Savings Solutions, told Reuters last December. His company helps health plans and employers seek lower-cost prescription medicines. It also conducted the new analysis on drug prices.
In December, Rea predicted that the number of 2019 increases would be even greater than in past years. It appears he is correct.
The more than 3,400 drug price increases in the first half of 2019 is a 17% increase over the number of drug price hikes in the first half of 2018. In addition to the Prozac generic, the drugs that saw triple-digit increases included the topical steroid Mometasone, which had a price increase of 381%. A pain reliever and cough medication (Promethazine/Codeine) saw a 326% hike while the ADHD treatment Guanfacine 2mg saw its price rise 118%.
In May, the Trump administration finalized a rule that will require drug companies to include drug list prices in television advertisements. The rule is slated to go into effect sometime this summer.
https://arstechnica.com/science/2019/07/big-pharma-raising-drug-prices-even-more-in-2019-3400-hikes-as-high-as-879/

Sound, Fury and Prescription Drugs

The Editorial Board - NYT - July 6, 2019

Nothing typifies the failures of health care in the United States like prescription drugs. Americans pay more for their medications — including those developed in America, with taxpayer dollars — than residents of any other country in the world. So many patients are rationing or outright skipping essential medications that stories of people dying for want of basic drugs — or fleeing the country to avoid that fate — have become commonplace. And despite years in the spotlight, the issue is no closer to being resolved: Prescription drug prices rose four times faster than inflation in the past six months alone.
So it’s easy to see why some officials, not to mention individual patients, would feel the need to seek relief outside the United States.
In recent months, President Trump has indicated that he would support state laws to allow the import of drugs from Canada (the closest country with a comparable regulatory system), an approach several governors have been clamoring for. The administration has also proposed using an “international pricing index,” based on prices paid in several other developed countries, to set drug prices in the United States. Then, on Friday, Mr. Trump announced that he would soon sign an executive order, creating a “favored-nations clause,” under which the United States would pay no more than the lowest price charged to any other nation for a given drug.
It’s unclear how some of these measures would work together. But as the election nears, the president seems increasingly determined to find a solution to the drug cost conundrum.

Mr. Trump campaigned on promises to “negotiate like crazy” with drug makers to lower prescription drug prices. But so far his administration has struggled to live up to those promises. His public shaming of pharmaceutical giants like Pfizer last summer succeeded in getting several companies to delay scheduled price increases, but only for a few months. A new rule requiring drug makers to include the prices of their products in television advertisements is unlikely to accomplish much more — it, too, is predicated on the idea that shame will change behavior, even though the industry has proved remarkably shame-resistant.
The administration has several more ambitious proposals in the offing, including one to eliminate the rebates that drug makers routinely pay to insurers and pharmacy benefit managers (those rebates would instead go directly to patients). But those plans have yet to be formally carried out.
It’s worth noting that drug importation comes with many logistical pitfalls. The United States market is colossal compared with Canada’s; expecting the latter to fully accommodate the former would be like “putting a hippo on the back of a puppy,” as one expert put it. What’s more, the pharmaceutical industry and the Canadian government could easily erect roadblocks that would cancel out any potential savings, and many crucial drugs — like insulin — would be prohibitively expensive to transport and store across long distances. Officials in Vermont have spent at least a year working out their importation plan, and so far have found only a handful of drugs for which the savings would justify the effort.
As the 2020 election draws near, presidential candidates are putting forth numerous other solutions to the drug cost crisis. Those solutions range from the practical (tax drug companies on their price hikes) to the ambitious (let the federal government make its own drugs) to the fantastical (blow up the patent system and start over). If the plans get serious consideration, they would advance a long overdue dialogue about how the country wants to evaluate medications and what it is and isn’t willing to spend on them — a question that sits at the heart of America’s deeply flawed prescription drug system.
In the meantime, there are several things that the administration could do now, using the power it already has, to help the situation.

Price drugs based on the benefits they provide. In the United States, any drug is allowed to enter the market as long as the Food and Drug Administration decides it is safe and effective. And once it enters the market, drug makers are allowed to charge whatever they want for it. That’s not how it works in the rest of the world. In most other developed countries, insurance regulators and national advisory panels apply an extra level of scrutiny in deciding whether they’re willing to cover a new drug, and if so, how much they’re willing to pay for it. For example, Britain will cover a new medication only if the benefits it provides are high relative to its price. Germany will pay more money for a new drug, compared with an older one, only if the new drug is better in some way. By tying a drug’s price to its actual value, these countries ensure that their consumers have access to effective medications — while also protecting them from getting ripped off.
The United States government could begin to put a similar system into effect if it directed the Department of Health and Human Services to evaluate and rank medications based on their cost-effectiveness. The nonprofit Institute for Clinical and Economic Review already does this independently and has had success in getting some drug companies to lower some of their prices.
Negotiate with drug makers. In other countries, the government negotiates directly with the pharmaceutical industry (using comparative effectiveness data, among other things). In the United States, the system is scattershot. Private insurers and the Department of Veterans Affairs all negotiate with drug makers separately, which diminishes their bargaining power. In the meantime, Medicare is legally required to cover nearly all drugs approved by the Food and Drug Administration at whatever price the drug maker sets — direct, collective negotiation is prohibited.
Medicaid is similarly required to cover all drugs, no matter how well or poorly they work. The program receives an across-the-board discount from drug makers, but as critics note, that discount has not kept pace with the changing drug market. The Centers for Medicare and Medicaid Services does have the power to grant waivers to individual states that want to exclude certain drugs from their Medicaid plans — as some experts have argued — or that want to negotiate additional discounts for certain Medicaid prescriptions. But last year, when Massachusetts asked for such a waiver (the state wanted to exclude some medications that had been fast-tracked by the F.D.A. and approved with limited clinical data) the administration denied the state’s request.
Experts generally agree that haphazard bargaining is a key reason prescription drugs cost so much in the United States. If the Department of Health and Human Services were to permit such waivers in the future, it could lead the way to a better system.
Consider seizing patents. Two statutes enable the federal government to override patents on F.D.A.-approved medications and produce them at cost. The first, known as Section 1498, works as a sort of eminent domain and allows the government to override any patent if the patent holder is compensated fairly. The provision was invoked frequently in the 1950s and ’60s to obtain crucial medications at a discount. Its use waned in later decades as the drug industry’s influence over government grew.
The second statute, known as march-in rights, allows the federal government to take similar action on any product invented with government money. The United States has never used this power for a prescription drug, but a growing number of policy experts and consumer advocates are pressing the federal government to use it now, for drugs like Truvada (the only drug approved to prevent infection with H.I.V.), which the government funded and holds some patents on. Patent overrides certainly won’t work for every medication, but they have been used successfully in the past to force the drug industry to the negotiating table. Mr. Trump could send a powerful signal to drug makers if he utilized them now.

Involve the Federal Trade Commission. The F.D.A. has attempted to name and shame drug makers who use dubious tactics to prevent generic medications from coming to market, though it’s not clear how well those measures have worked. The F.D.A. has approved some 1,600 generic drugs in the past two years — an uptick from the final two years of the Obama administration, according to Kaiser Health News.
But many of those drugs still aren’t available in the United States, and experts say that anti-competitive practices are at least partly to blame. The administration could help combat such practices by directing the Federal Trade Commission to crack down on drug companies that employ them. The threat of investigations and steep fines — which the F.T.C. can levy — may finally succeed where shame has failed.
https://www.nytimes.com/2019/07/06/opinion/drug-pricing-trump.html?smid=nytcore-ios-share

Letter to the editor: Medical costs prevent expatriate Mainer’s return

Given the concerns about brain drain and an aging population, universal health care would be in the state's best interest. 

LTE - Portland Press-Herald - July 3, 2019

I grew up in South Portland. I’ve lived in Canada for the last 11 years, and now that I’m about to turn 30, I’m thinking about where I want to be – the city I currently live in, Toronto, is notoriously expensive, and the pace of life here feels punishing.
So I’ve been thinking more and more of coming home. My family is still there, and Portland and South Portland have everything I want – community, synagogues, growing cultural diversity, a quieter pace of life. I’d go back in a heartbeat but for one thing: health care.
One thing Canada has that Maine does not is universal health care. In Ontario, we never have to worry about premiums or co-pays; we don’t think twice about going to the clinic.
The summer before I left for Canada, I worked on the Maine People’s Alliance campaign for universal health care. I am still extremely proud of that work, and believe that health care is a right for everyone, not a commodity to be purchased by only the wealthy and struggled for by the rest. I’m saddened that Maine has not yet managed to achieve this goal.
My partner and I are young and hardworking, and we want to contribute to whatever community we end up in. I would really like that to be Maine. But health care remains our obstacle. Given the number of op-eds I’ve read over the years about Maine’s brain drain and aging population, and the exaltation that occurs when young people arrive or return to make their lives in Maine, I am hoping that this letter presents evidence of opportunity to Maine’s lobbyists and lawmakers.
I want to come home. To our elected representatives: Please make it possible for me to do so.
lana Newman
Toronto
https://www.pressherald.com/2019/07/03/letter-to-the-editor-medical-costs-prevent-expatriate-mainers-return/

Letter to the editor: Health care for all would cut costs

Workers currently spend close to 40% of their incomes on health care in return for relatively poor outcomes. 

LTE - Portland Press Herald - May 16, 2019

A Maine legislative committee recently began considering eight innovative bills aiming at health care for all.
As a longtime Mainer originally from Connecticut and New York City, with family in Germany and clients around the world, I’ve given a lot of thought to how “people from away” take care of themselves. They do a better job than we do.
It’s about time for Maine – and America – finally to start giving serious thought to universal health care.
Some conservatives like to say, “Oh, we can’t have that. It’s too expensive, and nobody wants to pay high taxes like the Europeans do.” But in reality, the vast majority of Maine employees already have private health insurance premiums automatically deducted from their paychecks.
If you look at these deductions as taxes – which they are, for all practical purposes – we pay some of the highest rates in the world, according to People’s Policy Project (close to 40 percent of our income!) while getting some of the worst health outcomes of any developed country. By contrast, in Finland, for example, which has great health care but famously “high” taxes, the rate is only 23 percent.
This is ridiculous and unfair. All we’re doing is helping rich insurance and pharmaceutical companies get even richer – at the expense of every Mainer.
Fortunately, other states are already catching on. In New York state, for example, a recent Rand Corp. report on a single-payer proposal found that the plan would cut health care costs dramatically for lower-income people – while middle-class households would save about 10 percent of their income a year.
So what are we waiting for?
The time has come. Let’s iron out the kinks and – finally – launch true health care for all. It’s good for our fellow Mainers. It’s good for our economy. And it’s the right thing to do.
George Simonson
Harpswell
https://www.pressherald.com/2019/05/16/letter-to-the-editor-health-care-for-all-would-cut-costs/ 

Judge Blocks Trump Rule Requiring Drug Companies to List Prices in TV Ads

by Katie Thomas and Katie Rogers - NYT - July 8, 2019 

A federal judge ruled on Monday that the Trump administration cannot force pharmaceutical companies to disclose the list price of their drugs in television ads, dealing a blow to one of the president’s most visible efforts to pressure drug companies to lower their prices.
Judge Amit P. Mehta, of the United States District Court in the District of Columbia, ruled that the Department of Health and Human Services exceeded its regulatory authority by seeking to require all drugmakers to include in their television commercials the list price of any drug that costs more than $35 a month. The rule was to take effect this week.
With the 2020 presidential election race underway, the Trump administration has searched for ways to appeal to Americans burdened by the high cost of health care and prescription drugs.
The Affordable Care Act was once a reliable campaign trail villain for President Trump, but leading Republicans in Congress have become reluctant to revisit repealing the federal health care law. An appeals court in New Orleans on Tuesday is set to hear oral arguments on the constitutionality of Obamacare.

In some ways, rising drug prices have provided a more populist issue for the president and members of Congress. Politicians in both parties have clamored to show they are doing something, but little has changed and many companies have continued to raise their prices.
The administration’s effort to provide transparency in drug pricing was seen as largely symbolic — a way to hold drugmakers accountable for their prices, even if it did not directly do anything to lower costs and even if those prices were not what consumers usually paid.
On Monday night, Judd Deere, a spokesman for the White House, said: “It is outrageous that an Obama-appointed judge sided with big pharma to keep high drug prices secret from the American people, leaving patients and families as the real victims.”
And Caitlin Oakley, a spokeswoman for H.H.S., said the administration was disappointed and was consulting with the Justice Department on what to do next. “Although we are not surprised by the objections to transparency from certain special interests,” she said, “putting drug prices in ads is a useful way to put patients in control and lower costs.”
A spokeswoman for the Justice Department did not immediately respond to phone calls and emails requesting comment on whether the administration would immediately appeal the ruling.

David Mitchell, the founder of Patients for Affordable Drugs, which advocates lower drug prices, said his group never thought the television-ad rule would get drugmakers to reduce their prices. “But if you take that away, at least it was something visible they could point to that they’d done,” he said.
Last week, the president said he would be issuing an executive order on drug pricing, but the breadth of the order remained unclear. His administration has proposed other moves, including allowing older adults to more directly benefit from drug rebates in Medicare, and tying the cost of some drugs to their price in other countries.
Republicans and Democrats in Congress have also put forward a range of legislation that would address the issue, from limiting out-of-pocket costs for people covered by Medicare to allowing the federal government to directly negotiate the price of drugs.
Merck, Eli Lilly and Amgen had sued to block the television-ad rule in June, arguing that forcing companies to disclose their list prices was beyond the reach of the federal government as well as a violation of the First Amendment. The companies also said many patients have health insurance that lowers their out-of-pocket costs, and seeing the higher list price might lead them to stop taking drugs they needed.
The Trump administration, including Secretary Alex M. Azar II of Health and Human Services, had argued that requiring such disclosure could shame the drugmakers into lowering their prices.
In a statement, Lilly said it was pleased with the ruling. “We are committed to working with stakeholders across the health care system to find better solutions for the larger issue, namely, lowering out-of-pocket costs for Americans who still struggle to pay for their medicines,” the company said.
AARP, which represents older Americans, expressed disappointment in the judge’s decision. “Today’s ruling is a step backward in the battle against skyrocketing drug prices and providing more information to consumers,” the group said. “Americans should be trusted to evaluate drug price information and discuss any concerns with their health care providers.”

Judge Mehta, who was nominated to his position by President Barack Obama in 2014, did not delve into whether the proposed rule violated the First Amendment. He relied instead on whether the Department of Health and Human Services had overstepped its bounds because it sought to issue the rule under the authority of the Social Security Act.
While saying the court did not question the agency’s motives, he wrote: “Nor does it take any view on the wisdom of requiring drug companies to disclose prices. That policy very well could be an effective tool in halting the rising cost of prescription drugs. But no matter how vexing the problem of spiraling drug costs may be, H.H.S. cannot do more than what Congress has authorized. The responsibility rests with Congress to act in the first instance.”
Last year, Senator Charles Grassley of Iowa, the Republican chairman of the Senate Finance Committee, and Senator Dick Durbin of Illinois, a Democrat, proposed legislation that was similar to the Trump administration’s proposal. It passed the Senate in August 2018, and in May, the senators said they were still pursuing the legislation.
Mr. Trump has faced hurdles — some of his own making — as he has sought to make changes either unilaterally or with the help of Democrats. In May, the president said during a speech in the Roosevelt Room that his administration would work with Democrats to eliminate surprise medical billing — the practice of billing patients with undisclosed costs at the time of care.
He also singled out the drug-price disclosure rule.
The rule was “going to be something, I think, very special,” Mr. Trump said. “You may have heard about it. Maybe not. But it’s the beginning of a plan of transparency.”
https://www.nytimes.com/2019/07/08/health/drug-prices-tv-ads-trump.html

Even Researchers Don’t Know Which Doctors Medicare Advantage Covers 

by Austin Frakt - NYT - July 8, 2019

 

If you try to use Medicare Advantage, figuring out which doctors are available (and where) can be exceedingly difficult, if not impossible.
Medicare Advantage is the government-subsidized, private alternative to the traditional public Medicare program. It has had strong enrollment growth for years.
That growth has received a boost from the Trump administration, which has sent emails to people using Medicare to promote how much more coverage they could get for less money from private plans. Missing from those emails, however, is a mention of one big limitation of those plans: Many cover far fewer doctors than the traditional program.
That may not be a problem if you can find a plan that includes doctors you prefer, or if you can find covered doctors in convenient locations.

But that isn’t often the case, as government audits of Medicare Advantage plan directories show. The Centers for Medicare and Medicaid Services, which oversees the program, found that nearly half of entries had one of three problems: address errors, incorrect phone numbers, or doctors who were not accepting new patients. In 2017, the Department of Justice reached a settlement with two Medicare Advantage plans over charges of misrepresentation of their networks to regulators.
Other research reveals that Medicare Advantage provider directories are relatively poor sources of information. For example, a study published in the American Journal of Managed Care found that Google was more accurate.
“Directory accuracy is hard,” said the study’s lead author, Michael Adelberg, a former senior Health and Human Services regulator in Washington and now a leader of health care strategy for the Faegre Baker Daniels law firm. “But when a consumer joins a plan to get to a doc in the directory and then cannot, that consumer has a very legitimate beef.”
(I was a co-author on the study, along with Daniel Polsky, a health economist with Johns Hopkins, and Michelle Kitchman Strollo, a vice president and associate director of NORC’s health care department at the University of Chicago.)

Not only is it difficult for the average person to assess Medicare Advantage plan networks, but it’s also hard for researchers. Nevertheless, a few things have been teased out.
Working with plan directories — flawed though they may be — a Kaiser Family Foundation analysis examined the physician networks of almost 400 Medicare Advantage plans offered by 55 insurers in 20 counties in 2015. It found that networks of these plans included 46 percent of physicians in a county, on average.
In other words, if you selected a plan at random in these counties, you could expect that a bit less than half of doctors would be covered, at least according to its directory. (This does not necessarily mean those who are covered are taking patients or practicing in locations convenient for you.)
The study found considerable variation by specialty. Psychiatrists are least likely to be included in plan networks; a typical plan covered fewer than one-quarter of them. Ophthalmologist are most likely to be included; a typical plan covered nearly 60 percent of them. Depending on what kind of care you need, the extent to which plans cover specific specialists would be important to know. But there is no single source that meaningfully compares Medicare Advantage plans’ networks in the aggregate, much less by specialty.
This could change. A recent draft regulation would require Medicare Advantage, as well as other kinds of plans, to provide their directories in an electronic format that third parties could use to compare them, for example through apps or online.
Why do plans’ networks vary anyway? One possibility is that plans may strategically narrow or broaden their networks of certain specialties to try to attract more of the kind of enrollees they want (healthier, cheaper) and fewer of those they don’t (sicker, more expensive). Studies have shown that sicker beneficiaries are less attracted to Medicare Advantage, perhaps for these reasons. Another possibility, suggested by an Urban Institute study, is that plans narrow networks to control productivity and quality — for instance, covering only doctors who meet quality standards and tend to provide more efficient and valuable care.
A study of Medicare Advantage plans offered in California in 2017 found that the quality of obstetricians-gynecologists, cardiologists and endocrinologists covered by those plans tended to be comparable to those available through traditional Medicare. But some plan enrollees, particularly those in more rural areas, would need to travel far — in some cases exceeding 100 miles — to see those covered physicians.

The Kaiser Family Foundation study found that broader-network plans tended to charge higher premiums than “narrow network” plans (narrow network means covering less than 30 percent of doctors in a county).
One limitation of analyzing plan directories is that even if physicians are listed as in-network, they may not really be accessible because they’re too busy to accept new patients. So another way to assess the influence of Medicare Advantage networks on people’s access to care is to observe which doctors people in a specific plan actually see.
Looking at it this way, which colleagues and I did on a recent study published in Health Affairs, reveals that 80 percent or more of Medicare Advantage plans provide access to at least 70 percent of primary care physicians in their markets. Our study also suggests that narrow network plans are not growing over time in Medicare Advantage, which runs counter to the narrative that they’re taking over health care.
Still, because there is no way for Medicare beneficiaries to compare plan networks, people could easily stumble into a narrow network plan without knowing it. As with many things in health care, it’s hard to make an informed decision.
https://www.nytimes.com/2019/07/08/upshot/medicare-advantage-doctors-directories.html?action=click&module=Discovery&pgtype=Homepage

We can’t despair about our antibiotic crisis

by Michelle E. Williams - Washington Post - July 8, 2019

 

Michelle A. Williams is dean of the Harvard T.H. Chan School of Public Health.

When the media covers antibiotic-resistant bugs, they typically describe them with a sense of alarm, fear and helplessness.

Much of this is warranted: Antibiotic resistance is undermining the foundations of our modern medical system. No longer can we count on these drugs for a broad array of critical situations: for patients needing joint replacements or open-heart surgery or Caesarean sections; for immune-compromised individuals receiving cancer treatment or organ transplants; for people undergoing other increasingly commonplace, high-tech invasive procedures.

The Review on Antimicrobial Resistance, a project supported by the British government and the Wellcome Trust, predicts that, by 2050, drug resistance will claim 10 million lives a year worldwide. Closer to home, the Centers for Disease Control and Prevention estimates that 2 million people in the United States will suffer drug-resistant infections annually, and 23,000 will die. These numbers are likely dramatic underestimates: A 2018 study from the Washington University School of Medicine put the number of deaths between 153,113 and 162,044 .

So, yes, we should be scared. But we need not feel helpless.

Although the antibiotic-resistance problem is complex — spanning the domains of clinical medicine, basic research, economics and government policy — there is a clear path to reversing the situation. We must summon the determination to choose that path.

We are up against natural selection — Darwinian evolution itself. Antibiotics, especially when used improperly and profligately, create selective pressure on bacteria. The organisms most vulnerable to the drugs die quickly, while the most resilient bugs survive and replicate.

How can humankind prevail against nature’s ingenuity? We’ll do it the same way that public health has historically triumphed over infectious scourges such as smallpox and polio, and has fought other entrenched problems such as cigarette smoking, unsafe work­places and contaminated food. We must marshal a sustained, coordinated, multifront campaign.

Here is one prescription to solve the antibiotic crisis: First, prevent infections whenever possible. An infection prevented is a case of antibiotic resistance averted. Prevention is the essence of public health. In the fight against drug resistance, this means prescribing antibiotics only when they are necessary, especially in outpatient settings such as doctors’ offices and clinics. It means halting the unnecessary use of antibiotics in farm animals, a practice that nurtures drug-resistant organisms in our food supply. And it means channeling more money to hospital infection-control programs — which, unfortunately, are often low-priority budget items.

Second, invest far more money in research and development. Bringing a new antibiotic to market, from basic research through clinical trials, can take 10 to 15 years and cost upward of $1 billion. Yet the profits on these drugs are negligible compared with those for drugs that treat chronic conditions such as hypertension, diabetes or heartburn. Today, there are only 42 new antibiotics in the drug pipeline compared with more than 1,000 candidate drugs for cancer.

To spur research and development, we urgently need new types of financial incentives. One of the most innovative examples is CARB-X, a global partnership launched in 2016. CARB-X is a “biopharmaceutical accelerator” funded by a mix of private philanthropy and international governments, including the Biomedical Advanced Research and Development Authority at the Department of Health and Human Services. It offers 70 percent funding for the projects it selects; provides technical, business and scientific support; and lends its imprimatur to high-quality, early-stage research that private funders and venture capitalists can consider investing in to bring the drugs to clinical-stage development. Most of the research that CARB-X underwrites is carried out by small start-up companies unburdened by big firms’ fixation on the bottom line.

Once new antibiotics come to market, we must break the conventional link between sales and profits. Unlike other drugs, new classes of antibiotics will need to be preserved as long as possible, through limited use. That means their profitability should be tied not to sales but to their social value.

Earlier this year, Jim O’Neill, a former Goldman Sachs chief economist who chaired Britain’s Review on Antimicrobial Resistance, suggested nationalizing antibiotics production, such as through a taxpayer-supported utility that would focus solely on drug manufacture and distribution. Others have floated the idea of a for-profit company for which the core investors would be governments and charities, with the rest owned by the public. Unlike large pharmaceutical firms, these utilities would not expect blockbuster profits on their products — just a steady 4 percent or 5 percent rate of return.

Finally, we must reframe the way we think about antibiotic drugs. Like our rivers and forests, they are precious resources. Like our highways and bridges, they are public goods that should be available to all. Put simply, we must bring a collective moral vision to this high-stakes battle.

Reversing the tide of antibiotic resistance won’t be easy. The issue is similar to climate change in that it seems distant, abstract and insidious, but is potentially catastrophic for those it affects. Unlike with climate change, however, there are no “antibiotic resistance deniers.” Experts agree that this crisis is solvable with science and with money. The time to act is now.

https://www.washingtonpost.com/opinions/dont-despair-our-antibiotic-resistance-crisis/2019/07/08/b164ea4e-9f62-11e9-b27f-ed2942f73d70_story.html?

'If Grandma Is on the Table, No One Will Blink at the Price': A Former Drug Company Manager Explains Industry Price-Setting

by Fran Quigley - Common Dreams - July 1, 2019

Frances Leath no longer works in management for pharmaceutical industry giant Eli Lilly and Company, but she keeps tabs on the company where she spent the first 15 years of her career. She still lives in Indianapolis, home of the company headquarters. She has watched as Lilly’s dramatic increases in the price of insulin have triggered regular protests by angry patients, class-action lawsuits, and Congressional criticism.
Not to Frances Leath.  “I’m not surprised a bit,” she says.
It was not always this way at Lilly. When she started her career, there was an internal company slogan Leath would hear a lot: “We make drugs as if people’s lives depend on it.”
That was in 1987, when Leath was fresh out of DePauw University and working in Lilly’s finance division.  The company’s portfolio focused on medicines for acute illnesses, including several antibiotics. “One of the things I liked about working there was that the conversation was very much about patients,” Leath said. “You could see that our products like Ceclor were treating infections and saving lives.”
After going back to school to complete her MBA at Cornell’s Johnson Graduate School of Management, Leath moved to Lilly’s business development and strategic planning division. In that role, she worked directly with senior management. So, when things changed, she had a front-row view.
It started in 2000, when Lilly was waging a court battle aimed at protecting their antidepressant medicine Prozac from generic competition. Prozac sales earned as much as $2.6 billion a year, a quarter of Lilly’s entire revenue.  When the company lost the case, its stock price dropped more than 30% in anticipation of Prozac’s patent expiring in August 2001.
The impact was immediate, Leath recalls. “There was a huge amount of external pressure to get earnings back up and the stock price along with them,” she says. “Inside the company, you had staff saying, ‘We just lost $2 billion a year. Am I going to get laid off?’”
Then, the company had a big win. In clinical trials, its Xigris product was proving to be effective at treating severe sepsis, a complication from infection that was killing 225,000 people each year with no approved drug to fight it. Just two months after Prozac lost its U.S. patent, the Food and Drug Administration gave Lilly the green light to sell Xigris. The timing could not have been better. “Xigris may be just what the doctor ordered for Lilly,” the Wall Street Journal reported in September of 2001.
By then, Lilly leadership had spent several months discussing a potential price for Xigris. Leath recalls a preliminary consensus forming around a price of about $500 per dose. That was no bargain: $500 was a hundred times more than the company’s manufacturing cost and at the higher range of the medicine’s class. But, with Prozac sales plummeting and the medical community’s excitement about Xigris rising, that price began to seem inadequate. “All of a sudden, the price everyone talked about was $10,000 per dose,” Leath says. “Someone just pulled that figure out of their derriere, and then it became the number.”

"If Grandma is on the table . . .”

Leath’s observations about the random process of pricing Xigris is consistent with investigations into the opaque world of setting the price for monopoly-protected medicines sold to customers whose lives may depend on them. In 2015, the U.S. Senate Finance Committee conducted an 18-month investigation into how Gilead Sciences arrived at then-record prices of $84,000 and higher for its sofosbuvir-based Hepatitis C medicines. The Senate investigation found that the company considered the remarkable effectiveness of the medicine whose rights it had purchased, looked closely at what the market would bear, and set the highest price it thought it could get away with.
Gilead’s executives bolstered themselves for criticism. Once the drug was released, one company vice president offered a pep talk in an internal email. “Let’s hold our position whatever competitors do, or whatever the headlines,” he wrote in late 2013. “Let’s not fold to advocacy pressure in 2014.” They did remain steadfast, and that strategy combined with the take-it-or-leave-it nature of monopoly protection paid off: In the 21 months after the hepatitis medicines were introduced, the company collected $20.6 billion in revenue for them, fueling a breathtaking corporation-wide profit margin of nearly 50%.
That same year, the Wall Street Journal published an inside account of how Pfizer executives decided to set the price of a new breast cancer drug. As their Gilead counterparts did, Pfizer’s team ignored research and manufacturing costs, instead focusing on discovering the maximum price that insurers would be willing to pay, and at what price level physicians would balk at prescribing the drug. Worried about the intimidating nature of a $10,000 per month cost, Pfizer settled on the same approach that cause microwave ovens and flat-screen TV’s to so often carry price tags ending with 99 dollars or 99 cents. Executives decided that the new breast cancer drug would be sold at $9,850 a month.
But, in 2001, drug price tags like these were still unheard of. So Leath was stunned at the internal discussion of a $10,000 price for Xigris, which would make it the most expensive medicine on the market.  When she realized that the only ones sharing her concern were colleagues in middle management, she raised her objections to her boss. The new price could not be justified by research or manufacturing costs, Leath said, even with a healthy profit added in.
Her boss replied that justification based on company costs was irrelevant. “If Grandma is on the table, no one is going to blink at paying $10,000 to save her life,” he said. It was a phrase that came to be repeated in the Lilly executives’ pricing discussions from then on: “If Grandma is on the table . . .”
Raulo S. Frier, vice president of clinical services at pharmacy benefits manager Express Scripts Inc., told the Wall Street Journal much the same thing.  After the rumored $10,000 cost for Xigris became public--the drug would eventually be priced at $6,500--Frier was among many in the medical community who said there would be no choice but to meet Lilly’s demands. "A lot of hospital pharmacy directors are going to be hyperventilating over the cost," Frier said. "But they will be under a world of hurt if they don't use it."

"Some drugs do not belong in the hands of a for-profit company"

In the end, Xigris did not live up to the hopes of either the company or patients. Although Lilly consistently made $100 million a year from the drug, it was pulled from the market in 2011 after further clinical testing showed it did not have a positive impact on patient survival.
By that time, Frances Leath was long gone. In her decade and a half with Lilly, she had received regular promotions, a six-figure salary, and annual bonuses averaging more than $30,000. She had every indication that those numbers would only continue to rise. Yet, for the granddaughter of a United Methodist minister and chair of Staff Parish of her own Methodist church in Indianapolis, money could no longer keep her in the Lilly fold. “I was struggling, both emotionally and physically,” she says. “I felt like I was participating in things that conflicted with being a Christian.”
Leath is now a realtor, a job she loves. “There is no better feeling than helping someone find the home that is perfect for them,” she says. When she sees the Lilly price-setting on insulin, she shakes her head in recognition of the phenomenon she witnessed first-hand. “They have not generated the next blockbuster drug, and they feel the pressure to make as much money as they did when they had a blockbuster,” she says. “So, they are making up the difference with their chronic care medicines. That strategy was an active part of conversation when I was there.”
To Leath, the lesson learned from her experience in the pharmaceutical industry is that its leaders are now laser-focused on profits, along with the stock prices, salaries, and bonuses that are tied to them. No one should expect those executives to voluntarily restrain themselves from price-gouging on a lifesaving medicine they hold the rights to.
“I’ve concluded that there are some drugs that simply do not belong in the hands of a for-profit company,” she says. “They are driven by motivations that have nothing to do with the health of patients.”
https://www.commondreams.org/views/2019/07/01/if-grandma-table-no-one-will-blink-price-former-drug-company-manager-explains

We read 9 Democratic plans for expanding health care. Here’s how they work.

by Sarah Kliff and Dylan Scott - Washington Post - June 21, 2019

Democrats are talking a lot about Medicare-for-all. But what exactly do they mean?

Democratic candidates have run — and won — on a promise to fight to give all Americans access to government-run health care. A new Medicare-for-all bill in the House has more than 100 co-sponsors. But there are still real disagreements among Democrats. Some of the party’s 2020 presidential candidates have endorsed single payer, while others prefer more incremental improvements. They’ll soon start hashing out those differences at the debates.

To capture the full scope of options Democrats are considering to insure all (or at least a lot more) Americans, look at the half dozen or so plans in Congress, which all envision very different health care systems.

“Democrats ran on health care,” Hawaii Sen. Brian Schatz told Vox last year. “We now control one chamber of Congress. We have an opportunity and an obligation to demonstrate what we’d do if we were in charge of both chambers. We have an obligation to hear from experts and figure out the best path forward.”

We spent a month reading through the congressional plans to expand Medicare (and a few to expand Medicaid, too) as well as proposals at major think tanks that are influential in liberal policymaking. We talked to the legislators and congressional staff who wrote those plans, as well as the policy experts who have analyzed them.

These plans are the universe of ideas that Democrats will draw from as they flesh out their vision for the future of American health care. While the party doesn’t agree on one plan now, they do have plenty of options to choose from — and many decisions to make.

The nine plans fall into two categories. There are some that would replace private insurance and cover all Americans through the government. Then there are the others that would allow all Americans to buy into government insurance (like Medicare or Medicaid) if they wanted to, or they could continue to buy private insurance.

The bills we reviewed are:

We learned these plans are similar in that they envision more Americans enrolling in public health plans. They would all give the government a greater role in everything from setting health prices to deciding what benefits get included in an insurance plan. Experts say all these bills would almost certainly create an insurance system that does better to serve Americans with high health care costs.

“If you’re really sick and have high drug costs, it would be hard not to benefit from these bills,” says Karen Pollitz, a senior fellow at the Kaiser Family Foundation who co-authored a report comparing the different Democratic plans to expand public coverage.

But the Democrats’ plans differ significantly in how they handle important decisions, like which public health program to expand and how aggressively to extend the reach of government. Some would completely eliminate private health insurance, moving all Americans to government-run coverage, whereas others still see a role for companies providing coverage to workers.

Some bills require significant tax increases to pay for the expansion of benefits — while others ask those signing up for government insurance to pay the costs.

And while Democrats aren’t under any illusion that they’ll pass Medicare-for-all this Congress, they see the next two years as key to figuring out where consensus in the party lies. House Democratic leaders have already held first-ever hearings on Medicare-for-all.

“We want to have public hearings on this, we want to see movement on the issue,” says one Democratic House aide working on this legislation. “The Senate is still Republican but right now, Democrats have the opportunity to build support, have public hearings, and help move this idea along and educate members.”

Here are the key questions those hearings and that education will grapple with.

How many people get covered?

Bottom line: Some plans from the Democrats would cover all Americans — while others would provide insurance to more but leave some number of people uninsured.

In a way, this is the fundamental question. Even under the Affordable Care Act, 30 million Americans don’t have health insurance. The left believes health care is a human right, and mainstream Democrats aren’t far behind them. The whole reason Democrats are ready to take up health care reform again so soon after the ACA is to fix this problem.

Medicare-for-all (Senate and House): Every single American would be covered by a government insurance plan, after a short phase-in period.

Medicare for America (DeLauro and Schakowsky): This health care plan, informed by the work of the Center for American Progress and Yale professor Jacob Hacker, would achieve universal coverage for all legal residents, through a combination of private and public insurance — at least for the next few decades. It eventually foresees getting to a very similar level of coverage as the Medicare-for-all proposals in Congress, by enrolling all newborns into a government health plan and taking steps that would diminish the role of employer-sponsored coverage.

Medicare and Medicaid buy-ins (congressional plans): Millions more Americans would likely be covered, but experts don’t expect the various buy-in plans to achieve universal coverage. They would still, after all, be optional programs.

Healthy America (Urban Institute’s Linda Blumberg, John Holahan, and Stephen Zuckerman): This center-left plan from three Urban Institute fellows is explicitly not a plan for universal coverage, by attempting to work within certain political constraints. But it would, according to Urban’s estimates, cut the number of uninsured by 16 million in its first year.

A big part of the remaining uninsured would be undocumented immigrants. The plan’s authors said the program could be adjusted to cover that population but didn’t think there’d be political will to do so.

Bottom line: Democrats are split over whether expanded Medicare should make space for employer-sponsored plans — or get rid of them completely.

About half of all Americans get their insurance at work — and Democrats’ various health care plans make different decisions about whether that would continue.

Currently, the American health care system provides employers with a big incentive to provide coverage: Those benefits are completely tax-free. This means companies’ dollars stretch further when they buy workers’ health benefits than when they pay workers’ wages.

This, however, creates an uneven playing field. Fortune 500 companies get, in effect, a huge federal subsidy to insure their workers, while an individual who doesn’t get coverage through their job and makes too much money to receive subsidies under the Affordable Care Act doesn’t see any advantageous treatment under the tax code.

Medicare-for-all (Senate and House): Both the Medicare-for-all plans would make the biggest change and eliminate employer-sponsored coverage completely. Under these options, all Americans who currently get insurance at work would transition to one big government health care plan.

Medicare for America: This plan does let employers continue to offer coverage to their workers so long as it meets certain federal standards. At the same time, it would give employers an alluring, simpler option: stop offering coverage and instead pay a payroll tax roughly equivalent to what they currently spend on health coverage.

As to how alluring that plan would be, that depends a lot on how generous Americans consider this new Medicare program to be. Premiums would be capped at about 10 percent of a household’s income, while lower-income families would pay less. Out-of-pocket costs would be capped at $3,500 for an individual, $5,000 for a family, with less affluent families again receiving a break. The great unknown is how quickly those benefits pull people away from their work-based coverage into the new Medicare program.

Medicare for America makes another policy decision that would erode employer-sponsored coverage: It automatically enrolls all newborns into the public program. That means a new generation of Americans likely won’t get coverage through their parents’ workplaces — and would assure the Medicare plan a constantly growing subscriber base.

Medicare/Medicaid buy-ins

The question of work-based insurance is prickliest for the buy-in plans. Broadly speaking, under those bills, more Americans would be allowed to purchase a public insurance plan under the Medicare umbrella. Everybody who currently buys insurance on the individual market would be allowed to buy a Medicare plan, under each of the buy-in bills.

But they differ in important ways in how much they would let people leave their current job-based insurance for the new government plan.

The “Choose Medicare” Act (Merkley and Murphy): Merkley described his bill with Murphy as, potentially, a glide path to true single-payer Medicare-for-all. Under their Medicare buy-in framework, workers could leave their company’s insurance for the new public plan — but only if their employer decides to allow it. Otherwise, they’d be shut out.

(The bill does include a provision, however, allowing workers to keep the government plan once they sign up, even after they leave their current job.)

We asked Merkley why they left the decision up to the employers, not the employees. He pointed to a workers’ compensation program that had been successful in Oregon that was modeled the same way. He’s also worried about adverse selection, employers sending sick employees to the public plan while healthier workplaces stay in the private market; under the bill, it’s all or nothing.

Lastly, he emphasized the workers who transition to new jobs or go for a period without coverage would have a chance to sign up for Medicare and then keep that plan even after they get a new job.

“Workers can go to their employer and say, ‘I really would prefer to be in the public option,’” Merkley says. “We wanted to avoid the situation of employers pushing people out.”

The CHOICE Act (Schakowsky and Whitehouse): Small employers who are currently eligible to buy insurance through the ACA’s marketplaces would be allowed to participate in the Medicare buy-in. Workers at larger firms would be frozen out, however.

Medicare X (Bennet, Kaine and Higgins): Likewise, small employers eligible for ACA coverage could buy into Medicare under this legislation, but large employers could not. Medicare X would actually be limited to customers in Obamacare markets that had only one insurer or particularly high costs, for the program’s first few years, before expanding to the rest of the individual market nationwide.

Medicare-at-50 (Stabenow): Any American 50 years old or older would be permitted to buy into Medicare, including those who currently receive health insurance through their job.

Think tank plans

Healthy America (Urban Institute): The Urban Institute explicitly designed its Healthy America plan with the goal of disrupting the large employer market as little as possible. They expect only lower-wage workers whose current insurance isn’t very good anyway to move over into the brand new insurance marketplaces that would be set up under their plan.

Those markets would combine 70 or so million people on Medicaid with the people currently covered by Obamacare but more or less leave people who get insurance through their jobs alone.

“That’s a real barrier to doing anything big,” John Holahan at Urban said. “Most people with employer plans are reasonably happy with them.”

Bottom line: The vast majority of proposals expand Medicare, the plan that covers Americans over 65. But there is one option that would expand Medicaid, the plan that covers low-income Americans — and another option that creates a new government program entirely.

The American government already finances two major health coverage plans: Medicare and Medicaid. Taken together, these two programs cover one-third of all Americans: 19 percent of Americans get their coverage from Medicare, and 14 percent from Medicaid.

What’s more, both of these programs are popular. One recent poll found that 77 percent of Americans think Medicare is a “very important” program. Voters have recently given a boost to Medicaid, too: Voters in Idaho, Nebraska, and Utah all passed ballot initiatives that will expand the program in their states to thousands of low-income Americans.

Given the popularity and size of Medicare and Medicaid, nearly all the Democrats’ proposals use these programs as a base for universal coverage, changing the rules to make more people eligible. But there are differences in which programs they pick, and one plan that starts a new government program entirely.

Medicare-for-all, Medicare buy-in, Medicare for America: As their names imply, all these plans use Medicare as the base program for expanding health insurance coverage. Medicare is, after all, the only major health program run exclusively by the federal government (Medicaid is run jointly with the states), which can make it an appealing choice for a national coverage expansion.

Traditionally, Democrats have focused on Medicare as a base for expanding coverage. And five of the six legislative proposals we looked at use the program that covers the elderly as the one that would absorb additional enrollees.

Medicaid buy-in (Senate and House bills): Recently, Democrats have begun to eye Medicaid as another option, suggesting that we should focus on expanding the health plan that covers the poor to Americans with higher incomes.

Sen. Brian Schatz (D-HI), for example, has offered a bill that would allow every state to let residents buy into Medicaid. A companion bill is offered by Rep. Ben Ray Lujan (D-NM) in the House. That’s one important limitation in using Medicaid: States would have a choice about whether to offer this new benefit. With the expansion of Medicaid under Obamacare, more than a dozen Republican-controlled states refused to extend the program to thousands of their poorest residents.

But some Republican-led states have come around on Medicaid expansion. In an interview with Vox, Schatz said he likes the idea of a Medicaid buy-in because the program has proved popular across the political spectrum. In the 2018 midterms, three red states (Idaho, Nebraska, and Utah) voted to participate in Obamacare’s Medicaid expansion.

“Medicaid is popular in blue, red, and purple states,” Schatz says. “It’s not politically fraught anymore. So it’s a good place to land for progressives who want to make progress for everyone.”

Healthy America (Urban Institute): Rather than rely on any existing program, Healthy America would create a new one. Obamacare and Medicaid would effectively be combined into a brand new insurance market covering upward of 100 million people, and there would be a public insurance plan under the Healthy America brand.

Bottom line: Democrats generally agree that health insurance should cover a wide array of benefits, although there is some variation around how different plans cover long-term care, dental, vision, and abortion.

Every country with a national health care system has to decide what type of medical services it will pay for. Hospital trips and doctor visits are almost certainly included. But there is wide variation on how health care systems cover things like vision, dental, and mental health.

Covering more services mean citizens have more robust access to health care. But that also costs money — and a more generous health care plan is going to require more tax revenue to pay for all that health care.

Even Medicare, as it currently stands, has a relatively limited benefit package. It does not cover prescription drugs, for example, nor does it pay for eyeglasses or long-term care.

Instead, many seniors often take out supplemental policies to pay for those services — or end up selling off their assets to pay for care in a nursing home.

Medicare-for-all (Senate and House)

Both single-payer options envision Medicare covering more benefits than it currently does. The Sanders bill, for example, would change Medicare to cover vision, dental, and prescription drugs, as well as long-term care services as nursing homes. It would also cover a wide breadth of women’s reproductive health services including abortion, a feature that would likely draw controversy.

The House bill covers a slightly different set of benefits but, according to one Democratic House aide, is undergoing revisions to look more similar to the Sanders package. “We want to make sure we’re able to align the coverage services [of our bill] with the Sanders plan,” said the aide, who asked to speak anonymously to discuss the ongoing negotiations.

Medicare for America (DeLauro and Schakowsky): The Medicare for America plan mandates that all health insurance cover a robust set of benefits including prescription drugs, hospital visits, doctor trips, maternity services, dental, vision, and hearing services.

Medicare/Medicaid buy-ins

All three notable Medicare buy-in plans would cover the 10 essential health benefits mandated by Obamacare: outpatient care, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, and prescription drugs. None of them include vision or dental care.

The “Choose Medicare” Act (Merkley and Murphy): This bill covers essential health benefits, as well as the benefits included in Medicare’s current inpatient, outpatient, and prescription drug plans. Abortion and other reproductive services would also be covered.

The CHOICE Act (Schakowsky and Whitehouse): The ACA’s essential health benefits would be covered.

Medicare X (Bennet, Kaine and Higgins): Same. The new public plan would cover the essential health benefits dictated by the 2010 health care reform law.

“The policy would have all the ACA benefits. We’d give HHS the time and seed money to figure this out and price it,” Sen. Tim Kaine (D-VA) told Vox previously. “There are studies, back from 2010, that suggest a public option would not only save money but it would make the markets more competitive.”

Medicare-at-50 (Stabenow): This buy-in is distinct from the others in that it preserves the existing Medicare benefits: part A (hospital care), part B (physician care) and part D (prescription drugs) — a reflection of it being targeted to an older population that is already near the Medicare age.

Think tank plans

Healthy America (Urban Institute): The benefits package is again based on Obamacare’s essential health benefits.

Bottom line: Democrats do not agree on whether patients should pay premiums or fees when they go to the doctor. Some plans get rid of all cost sharing, while others (largely those that allow employer-sponsored coverage to continue) keep those features of the current system intact.

Medicare is currently similar to private health insurance in that it expects enrollees to pay a significant share of their medical costs.

The public program, for example, currently charges seniors a $134 monthly premium (and a higher premium for wealthier enrollees). Traditional Medicare also has deductibles and co-insurance. An estimated 80 percent of Medicare enrollees have additional coverage to help cover those costs.

The plans offered by Democrats have really different visions for whether enrollees in a newly expanded Medicare would end up paying these kinds of costs — or if premiums, deductibles, and copayments would become a thing of the past.

Medicare-for-all (Senate and House)

Both Medicare-for-all bills would eliminate cost sharing completely. This means no monthly premiums, no copayments for going to the doctor, and no deductible to meet before coverage kicks in.

The only place where enrollees might pay out of pocket is under the Sanders plan, which does give the government discretion to allow some charges for prescription drugs — but even that would be capped at $200 per year.

This is very similar to how the Canadian health care system works but is actually quite different from European countries. Most countries across the Atlantic actually do require patients to pay something for going to the doctor. In France, for example, patients are expected to pay 30 percent of the cost of their doctor visit — and in the Netherlands, copayments range from $10 to $30.

In a previous interview with Vox, Sanders said he considered copayments for his proposal but “the logic comes down on the way of what the Canadians are doing.”

The senator who rails regularly against “millionaires and billionaires” doesn’t see value in asking those people to pay when they show up at the doctor. They’ll pay more in taxes to finance a system without copayments, but when they go to the doctor, he argues, they ought to be treated the same as the poor.

Medicare for America (DeLauro and Schakowsky): This legislation, unlike the single-payer Medicare-for-all options, continues having some Americans pay premiums tethered to their incomes. This reduces the tax revenue necessary to finance an expanded Medicare program — but also requires a slightly more complex system that can calculate each family’s premium and collect that payment.

Low-income Americans would be enrolled in Medicare without any premiums and receive relief from their out-of-pocket obligations. Higher-income Americans would be expected to pay a monthly premium (at most, 10 percent of their income) and pay deductibles and copayments (deductibles are capped at $350 for an individual, $500 for a family; out-of-pocket costs are capped at $3,500 for one person and $5,000).

Medicare/Medicaid buy-ins

There is one important common thread through these bills: Premiums would be set to cover 100 percent of the actual medical costs that the government plan expects to cover, as well as any administrative expenses — but nothing more. There would not be any profits or robust executive compensation, as there still is in the private market. Premiums could be adjusted by a limited number of factors: a patient’s age, where they live, the size of their family, and whether they smoke tobacco.

The most notable difference in the buy-in proposal is in how much patients would be expected to pay out of pocket.

The “Choose Medicare” Act (Merkley and Murphy): This is the most generous Medicare buy-in plan. The new government plan would cover 80 percent of health care costs, matching the “gold” plans on the ACA marketplaces. The bill would also add new out-of-pocket caps for the traditional Medicare population, people 65 and older.

The CHOICE Act (Schakowsky and Whitehouse): This bill would offer several versions of the public plan, with varying out-of-pocket costs: They would cover between 60 and 80 percent of expected medical expenses.

Medicare X (Bennet, Kaine and Higgins): By default, the government plan would be offered at two tiers: one that covers 70 percent of medical costs and another that covers 80 percent. The health secretary could also decide to offer health plans covering 60 percent of costs or 90 percent, but it is not required.

Medicare-at-50 (Stabenow): The health department would be charged with determining the cost of covering the buy-in population and setting premiums accordingly to cover that cost. Enrollees would be allowed to use the financial assistance available under Obamacare to help pay for their Medicare coverage.

Medicaid buy-in (Sen. Schatz and Rep. Lujan): The Schatz proposal would give the states leeway to decide how they want to set premiums, copayments, and deductibles. They would cap premiums at 9.5 percent of a family’s income (a provision that already exists for those covered under Affordable Care Act plans) or the per-enrollee cost of Medicaid buy-in, whichever is less.

Think tank plans

Healthy America (Urban Institute): Premiums would range from 0 percent of a household’s income, for people who make less money, up to 8.5 percent. Nobody would be asked to pay more than that.

The standard health insurance plan under Healthy America would cover 80 percent of medical costs. People with lower incomes would receive additional subsidies to reduce their out-of-pocket obligations, while consumers would also have the option to buy a plan with higher out-of-pocket costs but lower monthly premiums.

Bottom line: Most Democrats have focused their energy on figuring out what exactly an expanded Medicare program looks like. Legislators have given significantly less attention to how to pay for these expansions.

Bringing government health care to more Americans usually means finding more government revenue to pay for that expanded coverage. The Affordable Care Act, for example, expanded coverage to millions of people through a wide range of taxes that hit health insurers, medical device manufacturers, hospitals, wealthy Americans, and even tanning salons.

Right now, many of the details around financing remain murky. One reason for that is we don’t actually know how much these different plans would cost; the Congressional Budget Office hasn’t scored any of these plans yet (although there are a few independent estimates of how much the Sanders plan would cost).

Medicare-for-all

Senate: Sanders’s office has released a list of financing options that generally impose higher taxes on the wealthiest Americans, such as increased income and estate taxes, establishing a new wealth tax on the top 0.1 percent, and imposing new fees on large banks.

House: Over on the House side, aides say that while they are currently working on revisions to HR 676, that focuses mostly on updating the benefits package — and less on deciding how to pay for the package. They do not currently expect to release a financing plan in early 2019.

“Let’s get our policy straight first and then look for suggestions on financing,” says one Democratic House aide involved in the process. “It’s possible we might offer some ideas on financing, but that’s still under debate.”

Medicare for America (DeLauro and Schakowsky): There is a more detailed financing plan laid out in the Medicare for America legislation. The Republican tax cuts would be rolled back. An additional 5 percent tax on income over $500,000 would be applied. Payroll taxes for Medicare would also be hiked, as would the net investment income tax rate. New excise taxes on tobacco, alcohol and sugary drinks would be introduced. The bill also requires states to continue making payments to the federal government equivalent to what they pay right now for Medicaid’s costs.

Medicare/Medicaid buy-ins

Depending on how you look at it, financing is either one big advantage of the buy-in approach or it reveals the flaw in their design. These plans still charge people premiums, which would be calculated to cover the costs of covering people who buy the new public option plan as well as any administrative costs.

So there isn’t necessarily a need for a big new revenue source; the premiums are the revenue source. None of the Medicare buy-in plans included major new taxes or anything like you would see to pay for the Medicare-for-all single-payer plans. All three of them do set aside some money for startup costs, but it’s a marginal amount in the context of the federal budget. And the Medicaid buy-in plan does bump up certain doctor payment rates, which the legislators say would come from general revenue.

The differences are so minor, they aren’t worth going through in detail. But it’s important to remember the trade-off: Medicare and Medicaid buy-ins don’t require a lot of new money because people will be asked to pay premiums — but that also means people will be asked to pay premiums, something the more ambitious versions of Medicare-for-all try to eliminate.

Think tank plans

Healthy America (Urban Institute): Because Healthy America combines Obamacare and most of Medicaid, the proposal is largely funded by repurposing the federal dollars that currently go to those programs. That would cover the bulk of the costs, but Urban does anticipate the need for new federal funding.

Like many of its peers, Urban isn’t yet set on a specific revenue stream, but it has floated a 1 percent increase on the Medicare payroll tax, split evenly between employers and employees. That would bring in about $820 billion over 10 years, which Urban thinks would be enough to cover most of the new costs needed to fund Healthy America.

https://www.vox.com/2018/12/13/18103087/medicare-for-all-explained-single-payer-health-care-sanders-jayapal?_